‘Brexit effect’: New study by Walpole reveals impact of Brexit on UK luxury

A new study by Walpole has stated that luxury exports from the EU to the UK were on average 43 percent lower than they may have been without Brexit. According to the platform’s ‘Trading with Europe’ report, the fashion and accessories sector has been the hardest hit by Brexit-impacted trading, reporting a decline of 64 percent on exports to the EU.

In contrast, exports to markets outside of the EU have almost returned to pre-pandemic levels, Walpole noted. The EU, however, is still the UK’s largest export market for luxury, accounting for 32 percent of luxury exports in 2022. This is compared to 22 percent for the US and Asia and 14 percent to the Gulf.

In a statement, Walpole CEO, Helen Brocklebank, said: "The British luxury sector has incredible growth potential, with a projection to reach 125 billion pounds by 2028 [Walpole’s Luxury in the Making 2024 report,ed.]. However, to achieve this ambition, we cannot afford to have one arm tied behind our back. Strong links and favourable trading with Europe remain essential to reaching this forecast, alongside our success in other global markets, and key to supporting craft-led and high value manufacturing in the UK."

According to Walpole, businesses in the UK luxury sector have faced significant challenges following Brexit, including delays to exports, new certification requirements and customs complexities. Refunds, VAT reclamation and inconsistent enforcement have also presented obstacles, resulting in some absorbing losses on returned goods and experiencing operational uncertainty.

Walpole is thus calling on the UK government to initiate a number of strategies, including the introduction of a new digital labelling scheme, to join the Pan-Euro-Mediterranean Convention on Rules of Origin, secure a UK-EU Sanitary and Phytosanitary agreement and bring together freight companies to create consistency in trade rules.